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Fox v. McCormick

United States District Court, D. Columbia

December 9, 2013

ROBERT FOX, JR., et al., Plaintiffs,
v.
ROBERT MCCORMICK, et al., Defendants

Page 134

[Copyrighted Material Omitted]

Page 135

For ROBERT FOX, JR., JAMES MCLAUGHLIN, FINN PETTE, DANIEL HIMMELBERG, RONALD PITTS, GLENN SZALAY, JOHN CROOKS, NYE NELSON, EDWARD P. PETTE, ANNE BROPHY, JAY BROPHY, Plaintiffs: Gregory Yann Porter, BAILEY & GLASSER, LLP, Washington, DC.

For ROBERT MCCORMICK, NOEL C. BORCK, PAUL O. GEHL, J. PATRICK TIELBORG, PAUL C. BENSI, JAMES T CALLAHAN, MICHAEL R. MURPHY, JR., TERRANCE E. MCGOWAN, BRIAN E. HICKEY, JOHN DUFFY, VINCENT J. GIBLIN, Defendants: Edward Robert Mackiewicz, Paul J. Ondrasik, LEAD ATTORNEYS, STEPTOE & JOHNSON, LLP, Washington, DC; Gwendolyn Prothro Renigar, LEAD ATTORNEY, STEPTOE & JOHNSON, Washington, DC.

For ABM INDUSTRIES INCORPORATED, Defendant: Charles Peter Groppe, Donald L. Havermann, LEAD ATTORNEYS, MORGAN, LEWIS & BOCKUS LLP, Washington, DC.

For ABLE ENGINEERING SERVICES, Defendant: Joleen Okun, LEAD ATTORNEY, OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C., Washington, DC.

OPINION

ROSEMARY M. COLLYER, United States District Judge.

Page 136

The question presented is whether employee-participants in a multiemployer, defined-benefit, pension plan have standing to sue plan trustees for breach of their fiduciary duty to collect contributions from long-delinquent employers. Plaintiff-employees here contend that collection of allegedly overdue contributions would have increased the assets of the plan, induced the trustees to raise benefit rates upon retirement, and ultimately enlarged participants' monthly pension benefits. The Court finds that Plaintiffs do not have standing to sue on the claim as presented in Count I, and will dismiss Count I without prejudice. Because Plaintiffs voluntarily and timely move to dismiss Counts II and III, those Counts also will be dismissed without prejudice.

I. FACTS

Eleven individuals bring this potential class action lawsuit under the Employee Retirement Income Security Act (ERISA) of 1974, as amended, 29 U.S.C. § § 1001 et seq. Robert Fox, Jr., James McLaughlin, Finn Pette, Daniel Himmelberg, Ronald Pitts, Glenn Szalay, John Crooks, Nye Nelson, Edward Pete, Anne Brophy, and Jay Brophy (collectively, Plaintiffs) declare that they are members of Local 501, International Union of Operating Engineers, which represents stationary engineers in parts of California and Nevada, that is, " engineers who are responsible for the maintenance and repair of equipment at fixed locations such as hospitals, hotels, or arenas." Compl. [Dkt. 1] ¶ 30. All Plaintiffs also are participants in the Central Pension Fund of the International Union of Operating Engineers and Participating Employers (Central Pension Fund). Id. ¶ ¶ 5-15, 30; see infra note 1. In Count I, Plaintiffs sue twenty-one current and former Trustees of the Central Pension Fund, on behalf of the Fund, " to recoup the plan assets squandered by the trustees' failure to pursue claims for fringe [benefit] contributions . . . ." Compl. ¶ ¶ 2, 16-29. Specifically, Plaintiffs contend that ABM Industries, Inc. (ABM) and Able Engineering Services (Able) failed, for decades, to contribute to the Central Pension Fund as required and Trustees breached their ERISA fiduciary duties by not ensuring that ABM and Able satisfied their obligations to make contributions. Id. ¶ ¶ 1-2.

A. Overview of the Central Pension Fund

The Central Pension Fund is a multiemployer pension plan as that term is defined in Section 3(37) of ERISA, 29 U.S.C. § 1002(37). It is maintained under a Restatement Agreement and Declaration of Trust, administered by Trustees at its headquarters in Washington, D.C. Michael R. Fanning is the Chief Executive Officer of the Central Pension Fund.[1] The Central Pension Fund pays covered retirees a defined monthly benefit. Compl. ¶ ¶ 39-40.

Page 137

The Central Pension Fund is a defined benefit plan, which means that it pays covered retirees a fixed, or " defined," monthly benefit. Id.; see also 29 U.S.C. § 1002(35); Fanning v. High Mountain Inspection Servs., Inc., 520 F.Supp.2d 55, 57-58 (D.D.C. 2007) (finding the Central Pension Plan to be a defined benefit plan). Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 119 S.Ct. 755, 142 L.Ed.2d 881 (1999), provides the details that characterize a defined-benefit plan as relevant to this litigation:

Such a plan, as its name implies, is one where the employee, upon retirement, is entitled to a fixed periodic payment. . . . [T]he employer typically bears the entire investment risk and--short of the consequences of plan termination--must cover any underfunding as the result of a shortfall that may occur from the plan's investments. . . . Given the employer's obligation to make up any shortfall, no plan member has a claim to any particular asset that composes a part of the plan's general asset pool. . . . Since a decline in ...

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